File Sharing and the ISPs

Whilst music industry bodies in the US pursue ISPs though the courts in order to get billing addresses of subscribers, one European ISP (Tiscali) has bean striking up a partnership with P-to-P network Kazaa. The logic of the move, however is questionable, to say the least:

Firstly, it does a very good job of alienating the music industry – as seen with the IFPI’s response. Which is very short sighted if they ever have hopes of distributing music legitimately in the future.

Secondly, is the potential increase in traffic worth the hassle it will bring? One of our recent European reports shows that the majority of European ISPs are actually concerned about the drain placed on their networks by heavy file sharing activity. Nearly half of ISP executives interviewed believed that up to 25% of their subscribers were regular file sharers. The issue is becoming so much of a problem that many major European ISPs are now placing data limits for broadband accounts.

File sharing itself is simply not a long-term opportunity for ISPs. It may bring increased initial subscriber uptake, but that sort of activity cannot be sustained on a long-term basis without causing a quality of service drop for other customers. Far better that ISPs look to legitimate music services where they can:
increase ARPU,
decrease churn,
increase subscriber uptake,
and introduce a whole whost of cross promotional opportunities – both for themselves and commercial partners.

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